Marketing Strategy Development Adalah – Your business is doing well – but the question remains: Can you sell more? Are there opportunities to increase market share? Is there any way you can continue your product diversification efforts? Companies hoping to increase revenue can do so in a variety of ways – such as increasing their advertising budget, expanding their sales team, and investing heavily in product development. However, one often-overlooked way to boost your gross sales is a deliberate, well-researched and expertly executed market development strategy. In this article, we will explain what market development is and how you can use it to increase sales and grow your business. Then, we look at some examples of market development strategies that work for the best businesses today. What is market development? Market development is the expansion of the total addressable market (TAM) and the amount of market share that can be expected. The Ansoff Matrix (or Product/Market Expansion Grid) shows how companies can expand their TAM in four categories: market penetration, market development, product development and diversification. Each category depends on two axes – one for the market and one for risk. A company can expand its efforts in a new or existing market and each creates a risk in more or less for the business. Market Penetration When a business wants to expand its existing market with little risk, it can try a market penetration strategy. In this scenario, TAM increases because by offering a new product or service, the business can effectively increase the maximum amount of revenue that can be obtained from the existing customer base. Product launches are an effective way to execute this strategy. Product Launch – A company can release a new iteration of a product that has been successfully sold in the market. The purpose of launching a new product is to generate excitement and buzz around the brand to increase sales. Product Development A higher-risk way to expand in an existing market is through product development, but make no mistake – this market development strategy can be rewarding. Developing a new product is a complex process. Businesses need to understand the market because market interest is the driving factor in product development. If the audience is not receptive due to a lack of education about the product, a poor marketing campaign to promote the product, or even bad timing of the product launch, this strategy can be difficult to execute. However, companies that fail to develop new products usually have deep learning to implement their next market development strategy. Product development takes many forms, here are some: Rebranding – If the business has been in hot water for a long time or for a long time, it may be that the market is disconnected from the brand. This can happen due to lack of advertising around the brand, outdated product positioning compared to the competition, or lack of confidence in the market. The company can rebrand itself to reconnect with the existing market while positioning itself as a viable option among the competition. Adjusting product packaging, giving it a new size, flavor or color, or even changing the name of the product or brand can help companies rebrand their products to better position them in the existing market. Repricing – Another way to gain traction in an existing market is for a business to make a product more accessible or desirable to that market through pricing. Repricing does not necessarily mean lowering prices, although this is one way to implement product development strategies. It may mean that the brand is moving in the market to show value or luxury, thereby justifying a price increase to capture these consumers. Market Development You can take a less risky approach when developing new markets. In order to develop the market, the business can take some risks. In this example, TAM increases as the business adds more people to its target market – thus serving new customers without investing in a new product line. Here are some ways a business can develop new markets: Geographic Expansion – Research can reveal the ideal market for business success based on the current location of the business. Geographic expansion works for both brick and mortar businesses and online businesses. Franchising – Giving individual business owners the right to use brands and trademarks associated with their company is another way to expand into new markets without high risk. In a franchising agreement, the franchisee usually pays an initial fee to the franchisor to acquire the right to operate the business. Diversification Sometimes, a business can break out of its normal operations and markets to create products for completely different industries and markets. Therefore, diversification can be a big risk for a business, but it can be very rewarding if done effectively. Diversification of the same product – A company can realize that raw materials or by-products of the goods sold can be reused in new products that can be marketed to a different audience than those who currently buy their products. Unique Product Diversification – Instead of using existing products, a company can take a unique approach to break into a new market by offering a product or service that is different from anything else offered in the industry. How to Create a Market Development Strategy Research your development opportunities. Set growth goals. Create a marketing plan. Go to the market. Analyze your results. Deciding when and how to expand an existing market should be a methodical process. Just because your business has been struck by lightning once does not mean that your new expansion plans will be successful. Because of this fact, follow these steps and use these resources to determine if you need to develop your market, how you need to develop it, and if the initiative is successful or not. Step 1: Research your development opportunity. It’s always tempting to chase the hottest trends – whether that means expanding your focus area for your consulting business or adding more items to your restaurant menu. However, before you spend time, money or resources expanding your market based on trends, take these steps to determine if the expansion is worthwhile. View our Featured Buyer Persona Tool: HubSpot Buyer Persona Template Download This Template As you expand your market, you’ll encounter new or revised potential buyer persona needs, which are semi-fictional representations of your ideal customer based on market research and real data about your customers. available. Consider the motivations, demographics, and background of your new target market to help you decide whether or not the development initiative is a good fit. Market research Top Tools: HubSpot’s Market Research Kit Download this Kit Knowing your hypothetical position in the market is important before you try to enter it. To that end, conduct market research exercises like Porter’s Five Forces Analysis or SWOT Analysis to determine strengths, weaknesses, buyer power, substitute threats, or other attributes compared to competitors in this new market. Additionally, you’ll want to calculate your market penetration before moving forward with any plans to expand. Customer Top Tool Survey: Customer Satisfaction Survey Template Download This Template If you’re hoping to expand your current product line to generate more revenue from existing customers, make sure your targeted expansion is well received. Asking yourself why this development is coming from your organization is a good first step. However, talking to customers and surveying whether the proposed expansion will benefit their lives (and, more importantly, whether they will buy from you) is a necessary test point before expanding your offering. Step 2: Set growth goals. Successful market development will achieve sales, profits, employees, customers, products, users, locations, or a combination of these criteria. Because there is a lot on the line, create goals for what aspect of your business you want to grow, in addition to what is the growth goal for each criterion. For example, by adding more locations, you can set the following growth goals: Increase customers by 90%. Increase your income with 100% annual profit twice after returning your initial investment. Increase employees up to 20 people. During this stage, you should also consider the necessary requirements to help you achieve your growth goals, such as seed funding, tools and software to help you achieve success in your initiative. Finally, the most important metric to measure before trying to expand or grow your market is ROI. In this step of the process, compare the upfront costs of expanding your market as desired with the projected revenue figures from a successful expansion. If the ROI is not encouraging enough to move forward, you may need to go back to the drawing board and define a new growth strategy and